CIS merchant pig iron export prices kept trending down this week amid rising supply from the mills, particularly from Ukraine, market sources said.
S&P Global Platts put its weekly pig iron assessment at $280-$285/mt FOB Black Sea on Friday, indicating a midpoint of $282.50/mt FOB, down $2.50 week on week.
Some sales were reported well under $300/mt FOB, the level producers wanted to hold on to but mostly failed. A Ukrainian producer managed to sell 30,000 mt of basic pig iron for July shipment to the US market at $275-$280/mt FOB Black Sea, trade sources reported.
"But they have still 30,000 mt which they cannot currently sell at this level. I think levels of $250-255/mt FOB are realistic," a senior trader said.
Another Ukrainian producer was reported to have sold 50,000 mt to the US at $308/mt CFR New Orleans, which netted back to $285-$290/mt Sea of Azov, depending on the freight cost, a trader in Europe said. His counterpart in Russia noted that the last deals from a Russian mill he worked with were at $315/mt CIF New Orleans, roughly $295-300/mt FOB Baltic Sea, but that level is no longer workable as buyers in the US were ready to pay $275-$295/mt FOB now.
One Russian mill said its last deal prices were in the region of $300-$320/mt FOB Baltic Sea for September shipment and the mill was seeking even higher prices for October shipment, a mill source said. Buy-side sources noted that September-October shipment is a too-distant perspective yet to discuss prices, particularly now in the softening market.
The mood in the market has turned more bearish recently.
"The first signs of decline have already appeared -- customers are not in a hurry to buy," a European trader said.
Another trader, based in Russia, expected further price softening due to rising supply.
For example, DMZ planned to sharply increase its monthly output in June owing to the restart of the second blast furnace allowing to produce around 100,000 mt/month.
As reported, for many months in the last two years DMZ kept limited production, in some months only 40,000-50,000/mt, or occasionally halted production due to the military actions in eastern Ukraine.
Another Ukrainian producer Metinvest was also heard to be looking to ramp up its pig iron allocation to 150,000 mt/month, from 100,000-120,000/mt before, a market participant said.
